By Michael J. Searcy
Yes, you have seen some variation of this image before. Yes, some long time clients tease us about drawing it too often. And yes, it is pretty simplistic. However, it gets the point across, is easy to understand, and it impacts everybody, including those with substantial six-figure incomes.
We found the following article from financial author Bob Veres to be important content and wanted to share it with you. Although the words and thoughts are his, we feel the message helps illustrate what clients should expect from their advisor, and should know they have options if they aren’t receiving the level of service they expect.
What is the value that people get when they work with an objective, client-focused financial planner?
Home loans frequently make up significant amounts of household debt, and reducing as much debt as possible before entering retirement can seem like a good idea. A 2013 survey found that 40% of Americans age 55 and older believe that paying off their mortgage was the smartest financial move they ever made. There’s also a certain peace of mind that can come from having one less bill to pay in your later years.
By Michael J. Searcy
Let’s consider two forms of debt: consumption debt and investment debt.
Consumption debt comes from buying things you want or need when you don’t have enough cash to pay up front. This could include a car, a vacation, furniture or any number of items. These items are usually paid for on credit cards and can depreciate in value over time or immediately after purchase. For my long-time readers and clients, you know I am not a fan of consumption debt. I believe you should save up in advance for a purchase and pay cash, but I understand that, without a plan, this is easier said than done.
A Little Tax History
The first income tax suggested in the United States was during the War of 1812. The tax was based on the British Tax Act of 1798 and applied progressive rates to income. The tax was developed in 1814 but was never imposed because the treaty of Ghent was signed in 1815, ending hostilities and the need for additional revenue.
Several tax acts were proposed and passed in the 1860s. The Tax Act of 1861 proposed broad income taxation on any kind of income or wages earned by every person in the U.S. In 1864, a new tax act was passed to raise additional funds for the Civil War and reintroduced a sliding tax scale.
By Michael J. Searcy
If you’ve reached the month of March and your New Year’s Resolutions have completely flown out the window, you’re not alone. A Journal of Clinical Psychology report found that only eight percent of people are successful in achieving their resolutions. They also noted the number of money related resolutions was near thirty-four percent, so the low success rate is troubling because failing at smart money management can impact your future. Let the following six habits for smart money management serve as a guideline to help you get your finances in order and make life-long, healthy financial choices:
By Marc C. Shaffer
Most people would not complain about unexpected money coming their way, but knowing what to do with the money can pose an opportunity for some and a challenge for others. You may have received a large year-end bonus or even a significant monetary gift for the holidays. Perhaps you will be receiving a significant refund from your taxes in the next few months. Do you have a plan for how you would manage your money in this situation? Before you find an influx of cash burning a hole in your pocket, consider these tips for responsibly managing unexpected money:
By Marc C. Shaffer
Over the past few months, I have participated in six weddings. My guess is not a single one of the happy couples had Social Security spousal benefits in mind as they made the decision to merge their lives, both spiritually and financially. Social Security benefits may seem like less of a concern for these young couples; each of them has decades to go before reaching retirement age. However, for couples currently nearing retirement, the choices they make regarding Social Security can have a dramatic impact on their financial future.
By: Marc C. Shaffer
As you and your spouse near retirement, have you considered if filing and suspending your Social Security benefits makes sense for your needs and lifestyle? You can only file and suspend benefits if you are at or above full retirement age, but the act allows your spouse to begin collecting spousal benefits, while your benefit accumulates delayed retirement credits. The ability to receive a higher monthly payout before activating your full retirement benefits is an attractive option to many couples, but it is helpful to have an advisor walk you through the specifics before you make a decision.
By: Michael J. Searcy
When a law firm was told they needed to pay $40,000 into their cash balance plan to cover a non-highly compensated individual, they decided a financial second opinion might be beneficial. After meeting with an advisor that helped interpret the language they didn’t understand from their actuary, they knew their second opinion request had paid off. They discovered they could classify the employee in a more appropriate way and need only fund about $2,000 to the plan!
Getting a financial second opinion could be one of the most important financial decisions you make this year. Sometimes the findings can solidify the fact that your current advisor is doing a great job, giving you peace of mind about the advisor you have chosen.